Updates for Business Owners: Right to Disconnect, Casual Employment, and a New Definition to Employment (August 2024)

Employers: major changes to employment law have taken effect from 26 August 2024. Are you up to date with them?

We often say that the world of work is ever-changing and ever-evolving. A solid example: the Fair Work Act introduced significant workplace reforms when it was passed earlier this year. As a result, some of these changes took effect on 26 August 2024, while some changes for small business employers will take effect starting 26 August 2025.

We’ve summarised the reforms in the Act in this blog to help you prepare for the changes.

 

Right to Disconnect

What is it? The Right to Disconnect is legislation that introduces a right for employees to refuse to read, respond, or monitor communication from employers or third parties outside of their normal working hours unless that refusal is unreasonable.

For example, if your employee receives an email from their manager outside of regular working hours. The right to disconnect legislation gives your employee the right to not read or respond to this email as they aren’t on the clock. The aim of this legislation is to promote a healthy work-life balance, especially in an age of technology where connectivity is the norm.

 

When does it come into effect? The right to disconnect took effect on 26 August 2024 for businesses with 15 employees and above. For small businesses, it comes into effect on 26 August 2025.

 

What should employers do to prepare? 

1. Have a conversation with your team and make sure managers know what this looks like in reality. Putting a right to disconnect policy in place requires cooperation between everyone in the team—which will only work if they’re aware of what the policy is and what it entails. It would also be useful to cite examples of exercising the right to disconnect in your particular workplace to help managers and employees be more familiar with what this will look like for them.
2. Update employment contracts and/or policies to reflect this new legislation. Now that the right to disconnect is part of the Fair Work Act, updating employment contracts and policies would ensure compliance with the law. Consider adding a section to cover off on outside of work hours contact and reasonable contact in these documents. We also suggest adding a right to disconnect section in employee handbooks.
3. Consider adding disclaimers to email signatures to reflect expectations when it comes to out-of-hours contact. This can apply to communications within the business as well as those going to clients and other third parties. See a couple of examples here.

We’ve written a couple of blogs on the right to disconnect to help you grasp it:

1. What small businesses should do to prepare for the right to disconnect, and
2. Common misconceptions around this legislation.

 

Changes to Casual Employment

The new definition of casual

The Fair Work Act has also included a new definition of casual in the Closing the Loopholes bill.

 

What is it? The previous Federal Government introduced the first definition of a casual employee in an amendment to the Fair Work Act 2009 (Cth). From 26 August 2024, the new definition of casual has been introduced.

Under this definition, a person is a casual employee if, when they start employment:

• the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors, and

• they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

The previous definition of a casual employee relied on an assessment of contractual terms. In this new definition, the criteria for determining if an employee is a true casual will be determined by the practical reality of the working relationship, and whether there is a firm advance commitment to ongoing work.

 

When does it come into effect? This new definition will only apply to employees who are employed on or after 26 August 2024, or whose employment circumstances change on or after 26 August 2024. Employees who were classified as a casual with their employer before 26 August 2024 will remain a casual under the previous definition, unless they move to permanent employment.

 

What should employers do to prepare? Businesses that have casual employees should assess whether these employees are true casuals according to the new definition. For employees employed on or after 26 August 2024, a clear review of their work patterns and rostering arrangements should be done.

 

Changes to Casual Conversion

Before this latest amendment to the Fair Work Act, employers were required to offer casual conversion to eligible casual employees after 12 months of employment.

Casual conversion is the process of transitioning a casual employee to a permanent one. This gives them job security and entitlements like sick leave and annual leave. It’s a process that prevents casuals from being exploited and not being able to have job security.

These changes to the casual conversion are now in effect:

• Casual employees employed on or after 26 August 2024: Employers are no longer required to offer casual conversion. Instead, it will be up to the employee to request for conversion after being employed for 6 months (12 months for a small business employer). For employers, this means less of an administrative burden, and allows employees to be proactive in requesting for casual conversion.
• Casual employees employed before 26 August 2024: The offers and request for casual conversion still continue to apply for 6 months (12 months for small businesses).

 

For in-depth information on the changes to the casual conversion process, read Fair Work’s article.

 

New Definition of Employment

A new definition has been added to the Fair Work Act to help in determining the meaning of ‘employee’ and ‘employer’.

This means that workers who are currently independent contractors could be employees after the new definition takes effect. They could then enforce employee rights and entitlements against their employer.

Failing to properly characterise a worker as an employee may hold a business liable for sham contracting, employee dismissal claims, and failure to pay entitlements (like paid leave, notice of termination, or entitlements under awards). As well, employees have rights under the FW Act like requesting for flexible working arrangements, access to unpaid parental leave, and the right to disconnect, which a worker would have access to if they were properly defined as an employee.

To whom does this definition apply? The new definition of employment will apply to most employees and employers in the country. However, it will not apply to employees who are national system employees.

The new definition won’t affect the meaning of ‘employee’ or ‘employment’ under any contracts or other legislation, such as workers’ compensation, taxation, or superannuation legislation.

 

When does this take effect?

The provisions containing this new definition commence on 26 August 2024. Other changes are set to commence on this date, which may impact some employers. These include laws about unfair contract terms, workplace delegates rights, road transport regulation and regulating employee-like workers. Download our fact sheet here.

There have been plenty of changes and updates to the Fair Work Act. We’ve also written fact sheets on the legislation changes for Casual Employment and changes for regulated workers.

It can be overwhelming to keep up with all these changes… which is why we’re here. The team at Now Actually can help you navigate these changes, and coach, guide, and educate you in implementing these changes to comply with the law and be people-first. Contact our team now to find out how we can help!